Implant scandal takes toll on Sientra
Months after a scandal erupted over contaminated implants, Sientra released earnings results that showed how much a suspension of sales hurt the company.
The Goleta-based breast implant manufacturer released fourth quarter and year-end earnings on March 9. Revenues fell to just $1.5 million, compared to $12.1 million a year ago. Net losses ballooned from $3.2 million during the fourth quarter of 2014 to $28.3 million in last year’s fourth quarter.
Legal expenses, higher than normal employee costs and a non-cash, $14.3 million goodwill impairment charge were blamed for the widening loss. Sientra lost $1.57 per share for the quarter, compared to a loss of 34 cents per share last year.
But the big loss, which amounted to only 78 cents per share after adjustments did not stop Sientra from making an acquisition. The company said March 9 that It paid $7 million in cash for the rights to BioCorneum, an advanced silicone gel scar management product, from Enaltus LLC.
The big loss and acquisition announcement gave investors their first look at how Sientra’s voluntary suspension of sales hurt the company during the September to December quarter and what the future might hold. On March 1, Sientra began selling implants again from its one-year inventory of products.
On Sept. 23, European regulators suspended sales of breast implants by Sientra’s Brazilian manufacturer Silimed because implants at its Rio de Janeiro were contaminated by microscopic particles of silica and cotton.
Sientra voluntarily suspended U.S. sales Oct. 9, but maintained all along its products, which are sold in the U.S. and not Europe, are safe and pose no risk to patient safety. Until its products were pulled Sientra sold implants that had a strong reputation among plastic surgeons.
The sales suspension impacted Sientra’s bottom line significantly. Through the first nine months of 2015, Sientra revenues were $36.7 million, compared to $32.6 million in 2014.
Sientra sales ended the year down 14.8 percent though from $44.7 million in 2014 to $38.1 million last year. Sientra lost $41.2 million during the year compared to $5.8 million in 2014. Its loss of $2.61 per share was slightly higher than its loss of $2.28 per share, but was diluted by three million new shares that came on the market in a second public offering also held Sept. 23.
The company has about one year of inventory remaining, but has not restarted manufacturing. Sientra started selling off its remaining inventory March 1, but during an earnings call March 9, Sientra CEO Jeffery Nugent gave no timeline for finding a new manufacturer.
-Contact Philip Joens at pjoens@pacbiztimes.com
